What is an overdraft loan? Loan or overdraft: which is better for the borrower? An example of calculating an overdraft and possible overpayment for using the service

Obtaining a loan in the form of an overdraft (translated as “overdraft” means “short-term loan”) is common among both individuals and legal entities. Its main advantages are ease of repayment, duration of use of the open line, and the ability to receive money for a short time.

An overdraft is a line of credit that is opened to a specific current account (hereinafter referred to as the account). In fact, it is an opportunity to spend more of the balance on it. Using this banking product becomes more convenient when you issue a debit card, which is attached to a bank account with an open credit limit.

Overdraft - what is it in simple words, their types and basic concepts

When opening an overdraft, the lender sets a certain maximum amount of overdraft - the so-called limit. It can be used an unlimited number of times, that is, the overdraft is a renewable line - when a certain part of the limit is repaid, it is restored and again considered free for withdrawal.

To determine this value, when considering an application, the volume of average monthly receipts for the last few months is determined (depending on the lending conditions of a particular lender, this period ranges from 3 to 6 months). This volume does not include transfers between the potential borrower’s own accounts, or issuance of loans to other legal entities and individuals.

Sometimes, due to the peculiarities of payment systems, when funds are withdrawn from the borrower’s account in an amount that exceeds the balance (provided that credit overdraft was not opened) the so-called other type arises - prohibited (or technical). Such situations arise for several reasons:

• Delay in write-off for previous transactions. In this case, when making several payments by card over a short period (within a day, for example), part of the transactions “hangs” in the system in the “HOLD” status, that is, subject to write-off. This amount is included in the balance and can be written off again.
• The difference in exchange rates at the time of payment and the actual debit. This situation occurs when paying for goods in a currency that differs from the cash account currency.
• Error in crediting or debiting funds. In this case, the technical overdraft is closed manually by employees of the financial institution by correcting the transaction error.

Most often, such problems arise through the fault of the bank itself as a result of a temporary gap between the crediting and debiting of money, but the client has to pay for this violation.

The agreement for opening a cash account specifies the amount of the fine or penalty as a percentage of the amount of overspending (sometimes the fine reaches 50-60% of the amount of the debt incurred).

If such errors occur within one trading day, they are not taken into account and do not lead to the accrual of fines! Therefore, in addition to paying close attention to the balance on the card, if such a situation arises, the borrower must submit a written complaint to the card issuer.

It is beneficial for legal entities (especially trading organizations) to open an overdraft against collected proceeds. A prerequisite for receiving it is to deposit the proceeds into the account in an amount of at least ¾ of all receipts. In this case, the line limit may be equal to the monthly collection amount.

An analogue of such a line for individuals is salary overdraft. The role of collected proceeds in this case is played by guaranteed receipts of wages to the borrower's account. In this case, there is no need to additionally provide certificates about the amount of income, and the history of income and their regularity indicate the reliability and creditworthiness of the client. This type of lending is popular among bank employees and participants in salary projects.

In order to receive a positive decision on the application, the client must be served by a financial institution for such a period of time as is necessary to calculate the volume of receipts on the account (from 1 month to six months). The exception is the so-called " advance overdraft”, which is provided to the current account immediately upon opening it. A prerequisite for its issuance is the provision of current account statements from the organization that previously served the borrower. Most often, such products are provided in order to attract an additional flow of customers to cash settlement services (cash settlement services).

All of the above types of overdrafts are called continuous, however, there is another type of lending of this kind. Borrowing through an “overdraft” is very rare nowadays. with reset”, which involves periodic (once every 7-30 days) mandatory full repayment of the borrower’s debt. This condition is inconvenient, first of all, for the client and reduces the amount of interest paid, reducing profitability.

Receipt procedure

In order to arrange an overdraft, it is necessary, of course, for the client to have an open current account, which receives the bulk of all incoming payments. To open an account, you will need an identity card of the client - an individual or a set of legal documents of the organization: documents confirming the right to sign and a card with samples of the legal entity's seal. If a credit limit is opened for an account, you may additionally need:

• Certificates about the absence of delays in tax and other obligatory payments, about open current accounts in other service organizations, the absence of debt in them and file number 2 (unpaid claims) for legal entities;
• Statements from current accounts of previously servicing financial organizations (when opening an advance overdraft or if the current account was opened for too short a period);
• Second identification document;
• Documents for existing property. Most often, lenders do not require collateral (no surety or collateral is required), but in order to reduce the interest rate, increase the maximum amount, and as additional confirmation of solvency, such documents can be provided.
• Certificate of income (if the client is not “salary”).

To receive an overdraft, the client must meet the following conditions.

For individuals and individual entrepreneurs:

1. Registration is permanent or temporary in the territory of the bank’s presence.
2. Positive credit history (the history of lending as an individual matters).
3. Continuous work experience of more than 1 year and period of employment at the last place of work of 6 months (data may vary depending on the conditions of a particular lender).
4. Age from 21 (in some cases - from 18) years.

For legal entities:

1. Use of cash settlement services for at least 6 months and the presence of turnover on the current account (with the exception of advance overdraft).
2. Positive credit history.
3. Providing a certificate of turnover on current accounts in other banks (transfer of credit turnover may be required).
4. Sometimes - the period of validity on the market is from 6 months (otherwise the organization is considered newly formed and the loan parameters are calculated differently).

Overdraft price parameters

Review of an application for an overdraft takes from 1 day to 1 week. The maximum amount, depending on the degree of confidence in the client and the request, can range from 5 to 70% of the average monthly loan turnover. Overdraft rates vary from 15 to 50% and are constantly changing due to the revision of the Central Bank's key rate.

Deposits and guarantees are most often not required. Sometimes, if the borrower is heavily indebted, guarantees from the founders of the borrowing company are required as collateral.

Some credit institutions (for example, BANK AVANGARD) set a floating rate depending on the period of continuous debt (the longer it is, the higher the rate), and also charge an additional commission for withdrawals from ATMs.

The peculiarity and advantage of an overdraft is the accrual of interest only on the actually used loan amount.

If its value is 100,000 rubles, and the actual principal debt is 1,000 rubles, then interest will be charged on 1,000, allowing for significant savings.

What is more profitable: overdraft, credit, line or card?

Let's look at the main pros and cons of various types of lending in the table below:

Lending parameter	Overdraft	One-time loan	Credit line	Credit card
Ease of use	Yes	Yes	No (requires the signing of additional agreements for each tranche within the line; this is extremely rarely provided to individuals)	Yes Not issued to legal entities.
Easy to obtain	Yes	Yes/No (with fast lending, the rate increases significantly)	No (a large number of documents when opening and issuing each tranche)	Yes
Renewability of the limit	Yes	No	Yes/No (depending on line type)	Yes
Additional payments	For issuing and servicing the card	For issuance, loan servicing, insurance and collateral assessment	For opening the line, issuing each tranche, insurance and valuation of collateral	For issuing and servicing a card, issuing and servicing a loan
Early repayment	No limits	With restrictions	With restrictions	No limits
Security	Most often not required	Not really	Not really	Not really
Loan terms	Short	Short/Long	Long	Short
Interest payments	Higher than loans. Interest is calculated on the amount actually used	Interest is charged on the entire amount disbursed	Interest is calculated on the total amount of tranches issued. The service fee is calculated from the line limit.	Higher than loans. Interest is calculated on funds actually used. There is a grace period
Intended use	No	Yes/no (for non-targeted loans the rate is higher than for targeted ones)	Yes	No

Repayment of urgent and overdue debts

Closing an overdraft is different from a regular one-time loan and is often unclear to the user, since the amount of debt is constantly changing, and, unlike a loan, the borrower does not receive a fixed payment schedule.

In addition, the procedure occurs automatically after receipt of the borrower’s account and does not require writing applications or any actions on the part of the borrower. However, there are some nuances that you need to know when receiving this type of loan.

1. The amount of actual debt is distributed over the period until the end of the contract.

For example, on January 1, 2015, a client was issued an overdraft of 100,000 rubles for 12 months at 20% per annum. Repayments occur no later than the 25th of each month.

10,000 /12 months + interest accrued on the balance for the use of funds.

2. All receipts are written off to the account.

In our example: on January 5, funds in the amount of 7,000 rubles were credited to the account. From this amount the following will be paid:

• interest for using a loan in the amount of 10,000 for 3 days (from January 2 to January 5): (10,000 / 12 months) * 20% / 365 * 3 days = 1.37 rubles

• the principal debt is repaid in the amount of: 7,000–1.37 = 6,998.63

• actual debt balance: 10,000–6,998.63 = 3,001.37

• monthly payment: 3,001.37 / 12 months = 250.11 +% for the period

3. Despite early repayment, on January 25, funds must be received in the amount of the monthly payment calculated above, otherwise the amount will be transferred to the accounts of overdue debts, and fines and penalties will begin to accrue on it. Internal bank documents provide for separate accounting of overdue interest and overdue principal (250.11 in our example).

The procedure for writing off overdue payments is prescribed in the regulations of the Central Bank of the Russian Federation and provides for the following procedure for writing off upon receipt of the borrower's account:

• Penalties stipulated by the contract (for example, a one-time fixed fee for the occurrence of delay).
• Penalties that are charged on overdue interest for using a loan.
• Increased interest charged on overdue principal.
• Overdue interest.
• Overdue principal debt.
• Interest payable in the current period (not overdue).
• Current principal (not past due).

When depositing money for repayment, it is necessary to take into account the size of the current arrears in order to repay it in full.

Benefits of overdraft for small businesses

A peculiarity of small enterprises is a limited budget, especially at the stage of active development and establishment of a business. It’s difficult to get a “start-up” to start a business in the current economic conditions; lenders have strict requirements for the organization and require.

Video - overdraft on a current account:

The borrower will also be required to strictly adhere to the parameters specified in it (especially the volume of revenue and profit). As an additional guarantee of loan repayment, you will need to provide a guarantee or collateral (the best option is real estate, which small businesses simply do not have).

Overdrafts in this case help not to overpay for a loan that may not be useful (as is the case with a one-time loan), as well as to minimize the damage from cash gaps, and maintain continuity of payments to suppliers and other counterparties even if there is a lack of funds.

Overdraft lending is an easy way to get small funds for a short period.

If a company or individual needs a large amount, and early repayments are not planned, it is more profitable to issue a line of credit or a one-time loan. In this case, with the provision of security and a slightly longer period for consideration of the application, the overpayment for using the loan will be lower.

Video - in what cases is overdraft more profitable for entrepreneurs:

This mysterious overdraft loan can be classified as a lifesaver, allowing you to intercept money for a short period of time without resorting to the funds of relatives and friends. Of all the types of loans, I am most impressed by the account overdraft (by card), i.e. salary overdraft, as it is convenient and economical. So what is an overdraft?

Overdraft loan- this is a form of short-term lending, in which the provision of a loan is carried out by carrying out debit transactions on an individual’s account in the absence of funds in the account, resulting in an overspending of money (debit balance). The debit balance is the amount of the loan issued - overdraft. A debit balance on a customer's current account is allowed by the bank only if an overdraft loan is issued in the prescribed manner, and only within the overdraft limit established by the Bank.

Overdraft- this is the expenditure of funds from a debit card account in excess of the balance available on the account, i.e. crediting the client’s account, which is allowed by the bank in order to replenish the personal bank account of an individual for a short period of time. The opportunity to receive an overdraft loan is formalized by a loan agreement that has a certain validity period, usually 1 or 2 years.

Overdraft features

Main overdraft feature- this is a mandatory loan repayment at least once a month, multiple renewals throughout the entire loan period, interest accrual only on the actual loan debt.

Not every person understands banking terminology, and especially “ overdraft loan" or " overdraft on card" To understand how account overdraft works, I will explain it in simple steps.

Imagine going to the bank and:

• Open an account (salary, on demand) so that your organization can transfer your wages to this account.


• The principle of operation of such an account is known - an initial amount of money is deposited, and then the account can be replenished an unlimited number of times by crediting salaries to it, making transfers from other accounts or depositing cash through an ATM; money can be withdrawn from the account an unlimited number of times.


• Such an account works within the limits of the available balance of money, that is, you can withdraw from the account only the money that you or your organization deposited into it.


• For convenience, you are given a plastic card attached to this account so that you can withdraw money or top up your account through an ATM - this will be a personal bank account with a plastic card attached to it.


• But in everyone’s life there are situations when he made unexpected expenses or large purchases without taking into account the balance of money in the account, and there may not be enough money until the next salary transfer.


• Then you can visit the bank and apply for an overdraft loan for a year. This loan will be linked to your account and plastic card.


• Based on your salary, the bank will set you an amount within which you, if necessary, can borrow money from the bank. Setting such an amount is called an overdraft limit. Now you are allowed to “overspend” funds on your card account, but within the monthly limit.


• If you run out of money in your personal bank account, you can repeatedly use a bank loan without exceeding the overdraft limit.


• Borrowed funds are taken into account in your account, but with a minus. This debt to the bank is called an overdraft loan.


• The next time funds are received into the account, including wages, the negative balance on the account is repaid by writing off the loan by the bank (first), and the amount remaining after this operation is credited to the account.

So, when you resort to using a salary overdraft, the free balance of the overdraft limit is reduced, and when a salary is credited to the account, the overdraft limit is released and restored. Banks do not require you to immediately use the entire overdraft limit and keep it occupied throughout the entire lending cycle. The loan is disbursed only as needed and repaid as soon as possible. Interest is accrued only on disbursed loan amounts, which significantly saves interest costs.

Who gets an overdraft?

A credit overdraft is usually provided to individuals who have opened a personal bank account with a bank to which a plastic card is linked.

A credit overdraft can be issued:

• employees of the bank's corporate clients who receive their salaries into a personal bank account linked to a plastic card. Here the corporate client acts as a guarantor for the loan (overdraft) of its employees.


• bank depositors. Some banks even offer types of deposits with the simultaneous issuance of an overdraft credit card. After all, how convenient it is, if an unexpected need for short-term money arises, not to terminate the deposit agreement, but to use a short-term bank overdraft, and not lose interest on the deposit.

What is the registration procedure?

Each bank has its own procedure for registering an overdraft. Therefore, I will give an approximate list of documents for obtaining a loan (overdraft):

• overdraft loan application,


• borrower's questionnaire (filled out on standard bank forms)


• passport of a citizen of the Russian Federation


• a second identification document of your choice: foreign passport, driver’s license, TIN, insurance certificate of the state pension fund, compulsory health insurance policy (card).


• a document confirming the client’s income (several months). Such a document is not required if the salary is transferred to this bank.

So, for example, to apply for an Alfa-Bank overdraft loan, the client requires only two documents: a passport and a second (at the client’s choice) identity document. Fill out a short form and that’s it! The loan is almost yours! All that remains is to obtain the decision of Alfa-Bank’s credit committee, which, according to the bank’s advertising, is issued within a few days! Tempting! Although, in principle, this is what most banks in the country promise.

Municipal Komchatprofitbank issues an overdraft loan only upon presentation of a passport and the client filling out an application for an overdraft.

A loan (overdraft), as a rule, is issued to bank clients who meet the following requirements:

• having a permanent residence permit and residing in the territory served by the selected bank,


• having their main place of business in the territory served by the bank,


• having continuous work experience (the period is set by the bank)


• having no overdue loan debt to the bank.

Overdraft limit amount

The amount of the loan - overdraft for each client is considered and set by banks individually, based on the client’s average monthly salary and the method used by the bank for calculating the overdraft limit. Some banks set restrictions on the maximum overdraft limit per borrower.

Here are some examples of how to set a maximum overdraft limit:

1. Rosbank - from 3,000 to 90,000 rubles; from 100 to 3,000 $ or Euro;


2. Municipal Kamchatprofitbank – 100,000 rubles.


3. Bank “Center-Invest” – 50% of the average salary


4. Alfa-Bank - 30% of the client’s monthly income.

The range of interest rates for overdrafts is wide. In addition, many banks charge various interest rates and amounts for loan-related services (issuing a credit card, maintaining a loan account, loan support, receiving cash, etc.)

I will give two examples. Thus, Rosbank has set the interest rate for a loan (overdraft) at 24% (in rubles) and 18% (in foreign currency). But that's not all the costs! Rosbank charges 30 rubles or 2 dollars monthly for maintaining a loan account and 1% of the loan amount as a fee for maintaining operations on the loan account. In addition, you will definitely pay for cash withdrawals through ATMs and possibly for issuing an overdraft credit card. For regions where Rosbank branches operate, interest rates and related services are set taking into account regional characteristics.

And the interest rate for a loan (overdraft) of the Municipal Kamchatprofitbank is set at 29.2%. With such a high overdraft rate, the bank does not advertise the cost of related services.

Having signed up for an overdraft, you need to ensure that money is regularly deposited or received into your current account to pay off the debit balance monthly in accordance with the terms of the agreement. For example, under an overdraft facility that Alfa-Bank provides to current account holders, debt repayment must be made within 30 days from the date of provision of the loan. After this, you can again use funds within the overdraft credit limit. If this condition is not met, then you can’t dream of further lending.

The features of overdraft for individuals are as follows:

• the borrower must repay the existing loan debt - overdraft - at least once a calendar month, within the amount specified in the loan agreement. Most often, this is full repayment of the loan in one day,


• interest is calculated on the actual debt on the loan,


• withdrawals can be made as needed (repeatedly) in any required amounts, but within the overdraft limit.


• The loan is repaid automatically when your salary or any other funds are credited to your account.

Overdraft problems

Overdraft problems arising during the lending period:

• delay in transferring wages by employers, and as a result, failure to repay the loan (overdraft) within the period established by the contract.


• absence of a timely request from the borrower to revise the overdraft limit downwards, due to the expected decrease in income, and as a result - the impossibility of repaying the entire loan (overdraft) amount.


• lack of experience in concentrating funds on the account by the date specified in the contract, in order to repay the overdraft debt (once a month).

These overdraft problems lead to the following: the bank applying penalties, lowering the overdraft limit or completely stopping lending - worsening

An overdraft loan is a form of short-term lending, the essence of which is to provide the missing funds for current settlements on financial and economic transactions to a bank client.

In an operation such as an “overdraft,” a debit balance is formed on the client’s account, which is obtained as a result of payments made by the banking institution in an amount exceeding the current account balance within the operating day. The possibility of providing an overdraft is regulated by Article 850 of the Civil Code of the Russian Federation.

What is an overdraft loan and what are its purposes? Thanks to an overdraft, the bank client has the opportunity to make the required payments in the absence of his own funds. Those. The overdraft is used to replenish working capital. Thus, an economic entity has the opportunity to allocate additionally attracted working capital to:

• Purchase of raw materials or supplies;
• To pay for goods;
• To pay salaries;
• To pay off payments to the budget;
• Other expenses necessary for the normal functioning of the enterprise.

The need for a loan in the form of an overdraft may arise in many manufacturing enterprises for quite objective reasons.

One of the most common is a high value of the working capital turnover ratio.

Overdraft - pros and cons of this loan

To put it simply, the time interval from launching the production cycle and receiving payment for sold products is too long, during which there is insufficient working capital to ensure the continuity of the production cycle.

Conditions for providing an overdraft loan

In order for a bank to open an overdraft, a number of conditions must be met.

1. To begin with, the applicant for a loan in the form of an overdraft must be a client of this banking institution.
2. A certain period must pass from the moment of state registration of an enterprise. In this case, the bank sets the period at its discretion, but in most cases such a period is one year or more.
3. Availability of stable monthly turnover on the current account. Those. if you are just planning to do something and expect to use an overdraft for this, then there is no chance. This form of loan is provided for already operating projects. Moreover, the decision to provide an overdraft will also depend on the amount of monthly turnover on the account: with low turnover, you are unlikely to be able to count on an overdraft or its size will be insignificant.
4. Lack of a card index on the account and orders to suspend operations.
5. No late payments on loan obligations.

Overdraft provision and expenses

To open an overdraft loan, the bank client must write a corresponding application to the bank, attaching the required package of documents. Here, each bank has its own requirements, but basically these are registration documents (statutory documents), data from which the results of business activities can be analyzed. As a rule, this is the balance sheet of the enterprise as of the last reporting date or for the period: six months, one year, two years.

When signing an agreement with the bank, the overdraft period is set: from 30 to 180 days. Those. after the specified period, the resources borrowed from the bank must be returned and after that the overdraft line can be opened again. The principle is this: borrow it, pay it back on time, borrow it again, return it again.

Overdraft fees are as follows:

• Rate in percentage terms for allocating an overdraft limit;
• The interest rate on an overdraft loan.

It is very difficult to draw an unambiguous conclusion about the benefits of this type of lending in comparison with a standard loan; everything is purely individual. The idea is that an overdraft is used for a short-term period to solve current problems, but a loan is issued for a specific purpose, and, as a rule, for a longer term.

Credit card with overdraft

Not everyone can live within their means, and sometimes it is necessary to borrow a small amount before payday. Every time running to the bank and applying for a loan is somehow very difficult and time-consuming. There is a solution: get a card with an overdraft.

Such cards can be obtained by participants in corporate and salary projects. Typically, they receive a limit of 70% of their monthly salary. A card with an overdraft works as follows: if you need additional funds, you open an overdraft line and the bank gives you the opportunity to spend or withdraw funds in excess of those on the card, within the established credit limit. Then, within a certain period of time, you must return the borrowed money and pay the bank for the use of the borrowed money.

As for the conditions for the “overdraft credit card” program, they are completely different in each banking institution. For example, some banks provide a grace period during which a minimum interest rate will apply, while others do not provide grace periods. Interest may also vary, but generally its size is comparable to the rates on consumer lending programs.

A card with an overdraft differs from simple cards in that it operates in two modes simultaneously: it performs the functions of both a debit and a credit card.

This option is beneficial for people who periodically need to attract a credit resource, so to speak, as a safety net option. If you constantly use credit, it is easier to consider the option of getting a credit card with a long grace period. You can learn more about them from the article: Credit cards with a grace period.

In our article, we tried to explain to you what an overdraft loan is for legal entities and for individuals.

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Overdraft

In Russian banking practice, such a financial product as overdraft is increasingly being used.

Overdraft refers to the withdrawal of funds from a bank account in excess of the balance of funds in the account. Such a withdrawal creates a negative balance in the account and means that the bank is extending credit to the customer.

Overdraft financing allows customers to obtain short-term financing to cover payment gaps. Overdraft is not usually used as a regular source of financing.

Overdraft regulation in Russia

In Russian legislation, overdraft regulation is enshrined very fragmentarily, mainly in acts of the Central Bank of the Russian Federation.

The Civil Code regulates overdraft relations in Art. 850, according to which:

“In cases where, in accordance with the bank account agreement, the bank makes payments from the account despite the lack of funds (crediting the account), the bank is considered to have provided the client with a loan in the corresponding amount from the date of such payment.”

According to the existing definitions in the Regulations of the Central Bank of the Russian Federation dated March 26, 2007 N 302-P “On the rules of accounting in credit institutions located on the territory of the Russian Federation” and the Regulations of the Central Bank of the Russian Federation dated December 24, 2004 N 266-P “On the issue bank cards and transactions made using payment cards" overdraft - a loan received when there is insufficient funds in the account.

There are no special regulatory documents governing the procedure for overdraft lending, therefore the main terms of the overdraft are regulated by the borrower’s agreement with the bank.

Overdraft agreement

In banking practice, see, for example, Regulations of the Central Bank of the Russian Federation dated December 24, 2004 N 266-P “On the issue of bank cards and transactions performed using payment cards” and Regulations of the Central Bank of the Russian Federation dated April 1, 2003 N 222- P "On the procedure for making non-cash payments by individuals in the Russian Federation", an overdraft is issued through a bank account agreement. At the same time, “the rights and obligations of the parties related to crediting the account are determined by the rules on loans and credit (Chapter 42), unless otherwise provided by the bank account agreement”<1>.

<1>Article 850 of the Civil Code of the Russian Federation.

Thus, a bank account agreement with a credit provision, by its legal nature, should be classified as a mixed agreement<2>, which contain elements of a bank account agreement and a loan agreement. In this regard, the overdraft agreement must contain all the essential terms of the loan, namely: the overdraft limit, its repayment period, the interest rate for using the overdraft.

<2>Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated April 19, 1999 No. 5 “On some issues in the practice of resolving disputes related to the conclusion, execution and termination of bank account agreements”, Resolution of the Federal Arbitration Court of the Moscow District dated July 17, 2003 No. KG-A41 /4726-03.

Overdraft provisions can either be included directly in the bank account agreement or combined into a separate overdraft agreement, which is an integral part of the bank account agreement.

An overdraft agreement may include the following provisions:

• overdraft description: overdraft amount, whether the overdraft is renewable, change in the overdraft amount, intended use of the overdraft;
• procedure for granting an overdraft and/or part of an overdraft: conditions that must be met by the borrower before receiving an overdraft; documents that he must provide to the creditor; payments that are paid to the creditor, etc.;
• assurances from the borrower: that there are no cases of non-fulfillment of obligations, that the borrower has received all the necessary permissions, that the conclusion by the borrower of an overdraft will not contradict other agreements of the borrower, that there are no restrictions on the account, as well as tax debts, about the reliability and accuracy of the information provided by the borrower to the lender, etc. .d.;
• interest and expenses: the amount of interest and commissions and the procedure for paying them to the creditor, the procedure for reimbursing the creditor for his expenses;
• obligations of the borrower: provision by the borrower of collateral to the lender, submission of reports to the lender, sending of certain information by the borrower to the lender;
• the procedure for repaying an overdraft: on the write-off of funds credited to the client’s account to repay the borrower’s obligations to the lender, the right to write off the loan without acceptance, the repayment terms of the overdraft, the amount of the penalty (if this was not regulated in the article on interest and expenses);
• cases of non-fulfillment of obligations: late payment, failure to fulfill other obligations, unreliability of submitted documents, procedures for reorganization and liquidation of the borrower, the appearance of financial debt of the borrower, other adverse changes in the activities of the borrower;
• applicable law and dispute resolution procedures;
• validity of the agreement: the procedure for its entry into force and validity period, the procedure for its extension;
• other provisions: confidentiality, language of the contract, number of originals of the contract, etc.

Overdraft amount

The Central Bank of the Russian Federation does not have mandatory regulations regarding the overdraft amount, therefore the amount or limit of the overdraft is set independently by the bank in an agreement with a specific client and can be either a fixed amount or depend on the payment flows of a particular business, the time of receipt of payments, seasonal fluctuations in sales, etc. .d. For example, the overdraft amount can be no more than 30% of the average monthly turnover on this account.

The documents may specify the limit of a possible overdraft and the limit of each loan provided under the overdraft.

Overdraft terms

As we noted above, an overdraft is a form of short-term loan, the provision of which is carried out by debiting funds from the client's bank account in excess of the balance on it, resulting in the formation of a debit balance<3>.

<3>Resolution of the Federal Arbitration Court of the Moscow District dated July 17, 2003 N KG-A41/4726-03, Resolution of the Federal Arbitration Court of the Moscow District dated August 11, 1999 N KG-A40/2420-99.

Thus, the terms of the loan provided under the overdraft usually do not exceed 1 (one) month.

Interest and commissions

Due to the fact that the overdraft agreement is regulated, among other things, by the norms of the legislation on loans/credits, one of the conditions of the overdraft is the provisions on interest.

The procedure for calculating interest is determined by the overdraft agreement, but usually such interest is accrued every day.

What is an overdraft: why is it needed and how to use it correctly?

At the same time, banks should be careful with clients who, during the operating day, credit their current account, and at the end of the operating day, funds sufficient to cover the overdraft debt are received in their current account. Under such circumstances, cases may arise when the bank will not receive remuneration for such use of funds by the client, since there is no credit at the beginning and end of the operating day. To avoid such situations, the bank can include provisions in the overdraft documents that for crediting the current account, the bank charges interest for using the loan in the amount of the temporary debit balance as for one day of using the loan, or indicate that the loan under the overdraft is provided for a period at least one day.

The procedure for writing off interest by the bank is also specified in the overdraft documents. The most common option is for the bank to write off interest monthly, on the day of the month specified in the agreement.

The overdraft agreement may also contain provisions regarding fees that the bank will charge.

Overdraft repayment

The overdraft is repaid by the bank debiting funds received from the client's account. Such write-off occurs without acceptance, which is specified in the bank account agreement or overdraft agreement.

Security

An overdraft can be secured by any means of securing obligations, as specified in Art. 329 of the Civil Code of the Russian Federation, including guarantees of third parties or directors of the client, pledge of property, penalties, etc.

A.Yu.Burkova

Credit - overdraft: overdraft conditions, overdraft limit, overdraft features

The concept of overdraft and its comparison with a bank loan

Overdraft can offer more convenient use of bank customers' current accounts. It is similar to a loan, but more flexible and has a different purpose. Conventional loans are more suitable for large loan amounts over a longer period. It is not advisable to use an overdraft as a loan. Understand overdraft correctly and use the service only for its intended purpose.

Definition of the concept of overdraft in banking terminology

Definition of the concept: overdraft - bank lending to a client’s current account in conditions of insufficient or lack of funds. Overdrafts are like safe reserves in your checking account. They will allow you to borrow funds up to a certain limit when you have a zero balance. They can be useful for covering short-term cash expenses. Some bank accounts have an overdraft facility by default. This function is provided to clients who have high-trust accounts. If you don't have such an account, you can ask your bank about providing an overdraft facility for your personal account. Their decision will be based on your banking history. In some cases, you may have to pay a fee to connect to an overdraft. You do not have to use an overdraft; it is intended for reinsurance in unusual situations. Moreover, overdraft lending conditions are quite expensive. You have to pay the overdraft debt plus a lot of interest. Prices vary between banks and may be reasonable. There may also be auction discounts on monthly payments or interest.

Comparison of the concepts of overdraft and bank loan

The concept of overdraft implies that the client is reinsured in relation to his bank account, for a certain amount of funds, in certain situations. These are typical unexpected additional expenses of a bank client. When an “insufficient funds” error occurs during a write-off operation, the account function—overdraft—is activated. The function allows you to connect a credit reserve to an account, but not more than a certain amount. The maximum amount can reach up to 70% of the average six-month cash balance in the account history. The bank must inform you in advance about the amount of the overdraft and the interest for its use. Compared to the usual concept of a loan, an overdraft is more flexible. The concept of overdraft is comparable to a consumer loan. But in order to get a loan from a bank, it must be approved by an agreement and a repayment schedule, from which you cannot deviate. This will have a negative impact on the client’s credit history and will incur additional fees for making monthly scheduled loan payments.

What is an overdraft loan?

It follows from this that the banking overdraft service is paid. The service can be used by bank clients with a high level of trust for convenient use of current accounts. A bank loan is a transaction between a client and a bank on mutually beneficial lending terms with clear rules for repaying the borrower’s debt.

A businessman who needs money has to need banks.

Overdraft. What it is?

Overdraft is a special short-term loan scheme, possible provided that the borrower has his own bank account.

In other words, an overdraft is a short-term microloan that is provided to the borrower by crediting his bank account. That is, an overdraft user can spend from his card in excess of the amount available on it, of course, within the limit set by the bank.

There are permitted and unauthorized overdrafts.

The main difference is that with an authorized overdraft, the lender (bank) gives its permission to do so. The meaning of an authorized overdraft is that when withdrawing or paying for a purchase, the borrower, under an agreement with the lender, can use more funds than he currently has on his account (card), that is, receive a negative balance (overspending) and subsequently repay his.

The amount of money withdrawn “in excess” of what is available in the account is an overdraft.

What is an overdraft and how does it differ from a loan?

In case of an unauthorized overdraft, the borrower does not have such consent from the bank. Subsequently, the repayment of the resulting debt is carried out by writing off funds received to the current account of the cardholder, for example, the receipt of wages on the card. After restoring a positive balance, the right to receive a new loan is resumed. As a rule, overdraft is provided to trustworthy bank clients.

To receive it, you just need to write an application and provide the necessary documents (passport, other identity document and income certificate). The application is reviewed in a short time. If the bank gives the go-ahead for an overdraft, then a loan agreement is concluded for a certain period with the possibility of subsequent extension. The maximum amount of such a loan depends on the average monthly income of the borrower, and is set individually in each case.

The main differences between an overdraft and other loans are higher interest rates and the possibility of reusing repaid loan funds. Some banks provide an interest-free period for debt repayment, which lasts several days. Interest is calculated on the amount actually spent.

The moment of granting an overdraft loan is the day the bank makes payments from the borrower’s account. Persons who constantly use an overdraft must remember that the repayment of the loan amount under the overdraft agreement is carried out within the period specified by the agreement, and if it is not established, then within 30 days from the moment the bank submits a demand for its repayment.

This requirement is established by paragraph 1 of Art. 810 of the Civil Code of the Russian Federation. The moment of repayment of the loan amount and interest for its use should be considered the date of crediting the required amount to the bank account. Moreover, if the overdraft agreement grants the bank the right to directly write off funds from the client-borrower’s account, which, as a rule, is provided for by the agreement, then the moment of return of the loan amount with accrued interest is the date of crediting to the client’s account such an amount that is sufficient to satisfy the bank’s requirements , except for the cases provided for in Art. 855 of the Civil Code of the Russian Federation, which regulates the order of debiting funds from the debtor’s bank account when the amount available on it is not enough to satisfy all requirements.

In the absence of these requirements, when the bank has a real opportunity to repay the client’s debt under an overdraft agreement, it must take advantage of it.

In order to refuse an overdraft, you need to contact your bank with a written application.

Irina Sherbul

Bsadsensedinamick

# Business Dictionary

Definition, features, pros and cons of the service

The first overdraft was issued in 1728, when a customer was allowed to borrow £1,000 more than was in his account. The loan was issued by the Royal Bank of Scotland in Edinburgh.

Article navigation

• What is overdraft in simple words
• How does overdraft with grace period work?
• What does credit limit mean?
• Advantages and disadvantages of a banking product
• Why is overdraft dangerous?
• Conditions of provision for bank clients
• Types of overdraft
• Allowed – standard model for all types of overdraft
• Technical overdraft - what is it?
• Salary overdraft
• Micro overdraft
• Overdraft with collateral
• Umbrella
• Unsecured overdraft for a large amount
• Credit and overdraft - what's the difference?

An overdraft is a short-term microloan. A loan in the form of an overdraft has a number of features that make it beneficial for individuals and legal entities.

What is overdraft in simple words

A card overdraft is a loan that can be obtained from any ATM using your debit card. To do this, you need to sign a one-time agreement with the bank to connect the quick loan service.

The concept of overdraft translated from English means “overspending”. This service makes it possible, in addition to fixed assets, to use additional ones as a loan. Accruals are made to the salary card of an individual or to the account of an individual entrepreneur.

When withdrawing additional funds from the card, the first money received into the account will be transferred to the bank as payment of the debt.

A bank overdraft provides an opportunity to quickly receive the funds you need at the right time. But you can use it only if you are sure that you can quickly repay the debt. Failure to meet your overdraft repayment deadlines can result in high interest rates.

How does overdraft with grace period work?

The overdraft scheme is to provide a loan for a certain period, often 30 days, but with additional agreement with the bank it can be extended to 60 days. In this case, for each day of debt, a certain percentage is accrued, corresponding to the bank’s annual rate.

The grace period allows you to avoid interest charges if the debt is repaid on time. More precisely, if you take a loan from a bank in the amount of 1000 rubles, you will return 1000 rubles, without overpayments. The main condition of this option is payment of the debt within the period established by the contract.

You need to know what an overdraft limit is and fully comply with it. Violation of the established restrictions will entail penalties from the bank.

What does credit limit mean?

When you activate an overdraft, a limit on the loan amount is set. It is tied to the amount of funds turnover on the account. The limit of the established option will depend on the individual’s salary. For example, 10,000 rubles are credited to your account every month. The loan limit may be equal to this amount, but no more.

When checking your account, the ATM may display your available balance including overdraft. Be careful not to confuse fixed assets with credit.

Terms depend on the bank and your credit history. Certain credit institutions can provide a loan of up to 50% of the current amount.

Before signing up for a service, please read the contract carefully.

Advantages and disadvantages of a banking product

Overdraft is a special form of account lending, a convenient option on a bank card that will allow the owner to receive a number of advantages when a loan is needed.

Main advantages of the service:

• Low percentage. The rate is on average 2–6% lower than that of conventional loans.
• Automatic repayment of debt to the bank. If the client's account balance is positive, the funds will be automatically debited and transferred to pay off the debt.
• Independent regulation of the amount of debt. The client decides whether to use the loan or not. If a loan is needed, the borrower himself determines the amount (within the established limit) that he wants to receive at that moment.
• Fast connection. An important point that a bank employee analyzes to enable the option is the movement of funds in your current account. The banker can receive this information within a few minutes, so it won’t take much time to process a loan for your card.

The advantages listed above make overdraft one of the best ways to get a microloan. But it is necessary to take into account the disadvantages and risks of the service.

Among the disadvantages are:

• Limited possibilities for loan amount.
• Monthly repayment. It is necessary to close the debt 100% within the agreed period.
• It is necessary to maintain cash flow. The movement of funds in your account must correspond to the amount agreed upon in the agreement with the bank.

If the second and third paragraphs are violated, the bank may impose penalties on the borrower. If after 25–30 days the debt has not been paid, interest is charged, increasing the debt.

Why is overdraft dangerous?

Regularly using an overdraft, over time, clients begin to forget to return funds to their account in a timely manner. Such an oversight will lead to a number of consequences.

Failure to pay a debt on time is a violation of the terms of the contract, which may lead to:

• Fine. The bank has the right to impose sanctions on the borrower if there is a delay in repaying funds.
• Increase in interest rate. By the next loan tranche, the rate may increase by several percent.
• Denial of credit. If there is a regular delay in loan repayment, the bank may completely refuse the loan and terminate the agreement.
• Bad credit history. You should not think that if one bank refuses, you will be able to conclude an agreement with another. If you fail to comply with the bank's conditions, you will ruin yours. Every bank will know about your inability to pay your debts on time.

The danger of overdraft seems imaginary. Most borrowers believe that they will always be able to repay the loan on time, but in the end, sooner or later, many fall into a credit trap. To avoid tripping over pitfalls, follow simple rules:

• Remember the debt repayment date.
• There should be no loan debt for one day a month.
• It is necessary to maintain the cash turnover on the card agreed with the bank.
• Monitor the expiration date of the loan agreement.

Knowledge of these points will help to avoid violations and associated risks. But in order to know the terms, interest and other terms of the contract, when drawing up, pay attention to some of its points:

• Overdraft percentage.
• Commission for issuing a loan.
• Overdraft fee.
• Fee for considering an application to connect the option.
• Loan application and collateral fee.
• Insurance.

Not all expenses listed above may be specified in the contract. But when registering, you must carefully study these points.

Conditions of provision for bank clients

This loan is provided to individuals and legal entities. Phys. a person receives a loan for personal needs and can use it in any situation that requires additional funds.

Legal entities may need an overdraft in three cases:

• Cash gaps occur within a month;
• business needs a short-term loan;
• the company needs to have a “financial cushion”.

The use of an overdraft gives the company ample opportunities for profit growth. If you introduce additional capital correctly and in a timely manner, you can significantly increase trade turnover.

This scheme only works if an overdraft with a grace period is activated.

Each bank sets its own conditions for using the service. But there are general rules for concluding a contract:

• The loan term is 1–12 months.
• The debt must be repaid once a month, unless other conditions are specified in the agreement.
• A current account must be opened at the bank providing the service.
• Credit and debit card turnover should be stable.

If all the conditions and nuances have been studied, then you can start connecting. To obtain an overdraft you must do the following:

1. Contact the bank employee who will provide the loan.
2. Find out under what conditions the overdraft will be activated.
3. Provide the credit department with all necessary documents.
4. Wait for a decision on activation.

Bank overdrafts are issued subject to the client meeting all necessary requirements.

Types of overdraft

There are several types of overdraft, each of which differs in interest rates, payment limits, terms of provision and methods of repayment. There are several main categories of this loan:

• accessible;
• technical;
• salary;
• micro;
• collateral;
• umbrella;
• unsecured.

To choose the best option for yourself, you need to understand the difference between them. To do this, each type should be analyzed in detail.

Allowed – standard model for all types of overdraft

An approved overdraft is a type of collateral that meets the terms of the agreement. Such a loan is considered classic and is issued in accordance with all standard requirements. The limit is set in accordance with the average cash turnover on the account, and the average rate is 14.5% per annum.

Technical overdraft - what is it?

Unauthorized overdraft (also called technical, unauthorized or prohibited). The name itself suggests that withdrawals exceeding the balance on the card occur without the approval of the bank.

The issuance of a technical overdraft can occur for various reasons, for example, there was an overdraft amount of 1000 rubles left on the card, you paid for the purchase in dollars equivalent to the balance, but while the banking transaction was being carried out, the exchange rate increased, and the cost of your purchase was 1050 rubles.

Exceeding the limit is called an unauthorized overdraft. In this case, the client will see a red balance on his card (the amount of overspending that exceeds the limit will be highlighted in red).

Technical overdraft can be provided or unprovided:

• Provided. Negotiated with the bank and included in the contract. When it occurs, you must quickly repay the debt with the specified interest.
• Unintended. The occurrence of such a case is not specified in advance; in such a situation, the borrower will be charged a fine. This possibility is provided for by the provisions of Article 395 of the Civil Code of the Russian Federation.

Regardless of the type of technical overdraft, the debt must be repaid as soon as possible, along with the established interest, which is often up to 50% per annum.

Salary overdraft

One of the classic types. It allows you to overspend your salary card. This service is in demand because it does not require additional registration and is often installed on the card immediately after it is issued.

The limit of such a loan is on average 50% of the salary amount, and the period of validity of the loan agreement is no more than 12 months.

If a client needs a loan, he can withdraw funds from any ATM or pay with a card in a store. The next time your salary arrives in your account, the amount of debt will be automatically written off and transferred to the bank.

Micro overdraft

A special feature of this loan is the minimum established limit of 300 thousand rubles. This amount is insignificant for legal entities, so banks consider this type of loan a micro overdraft.

Not taking into account the minimum limit, the remaining conditions for obtaining and repaying the loan do not differ from the classic microloan.

Overdraft with collateral

Every bank wants to be sure of the return of their funds. Therefore, when providing an overdraft option, a credit institution may require collateral as a guarantee of debt repayment.

The bank accepts the following types of collateral as collateral:

• real estate;
• circulating products;
• cars;
• land;
• equipment.

All other terms of the agreement correspond to a standard overdraft.

Umbrella

Designed for a network of companies. It is expected that this will cover the cash gaps of the entire holding, which must include at least 3 companies.

The contract is drawn up for a period of up to 12 months. The service includes the following benefits:

• no commissions;
• flexibility in choosing a repayment scheme;
• possibility of changing borrowers during the term of the contract.

An overdraft will provide a “financial cushion” for the company in critical situations.

Unsecured overdraft for a large amount

For time-tested clients, an overdraft is provided without additional collateral of property. In such a situation, stable financial turnover on the card is a guarantee of payment.

It is worth considering that this only works for borrowers who have been cooperating with the credit institution for several years.

Credit and overdraft - what's the difference?

Both services give the client the opportunity to receive a cash loan for a certain period, but the conditions for obtaining a loan and repaying it differ significantly. The main differences between a loan and an overdraft are:

• Interest rate. An overdraft is issued at a rate that is on average 4% lower than a regular loan.
• Debt repayment period. A classic loan agreement is provided for a period from several months to several years, while overdraft debt must be repaid within 30 days from the date of receipt of the loan.
• Speed ​​of obtaining a loan. Loan processing takes from several hours to several days. You can withdraw or pay using an overdraft at any time in stores or terminals.
• Sum. You can get a loan in an amount several times your monthly income. Overdraft has a limit that cannot exceed the average turnover of funds on your bank card.
• Debt repayment. When overdrafting, incoming funds are automatically debited from the account to repay the debt; for loan repayment, there is a special schedule that distributes the repayment of the loan amount over several months.

An overdraft differs from a line of credit in a number of factors. But it is impossible to say for sure which type of loan is better. Each of them has its own advantages and disadvantages. You will have to choose the type of lending yourself, depending on your individual needs.

In this article, we described in our own words and in simple language what an overdraft is. Learn to use the service, learn the basic rules and nuances, and the service will help you out more than once in critical situations.

Literally translated, “overdraft” means “beyond the project.” The bank grants the client the right to pay for goods and services from his account/card in an amount exceeding the balance. As a result, an overdraft is formed, which constitutes the overdraft amount.

By providing a certain line of credit, the bank provides a “magic wand” in case of unforeseen and urgent expenses. Of course, he does not do this for free and only if it is provided for by the terms of the contract. On the one hand, the bank trusts the client, helping out in difficult circumstances, on the other hand, it teaches even those who have a negative attitude towards loans to take loans.

Overdraft, what is it in simple words

Imagine: you have a regular plastic card on which you receive wages and other income. You can only operate with the money that is in the account linked to the card.
An overdraft means that you can spend more money than you currently have. The bank does not care what you spend the additional amount on - the overdraft has no purpose. However, there is a limit set by the bank, beyond which you cannot “go into the red.” You can use the overdraft several times during the month: the free limit decreases when you borrow money and is restored after paying off the debt.

Salary overdraft

Overdraft is an additional option to salary payments or can be activated later at the request of the holder. The limit can be either a certain percentage of the salary amount or equal to one or two salaries. Some banks allow you to withdraw an amount equal to 4-6 salaries at a time. When a salary is received, the amount specified in the contract is automatically sent to repay the overdraft.

Do not forget that when you leave the organization, the limit is disabled. If you decide to change jobs, you will have to pay off the overdraft debt in full. If you do not have this opportunity, be sure to contact the bank - the credit manager will select the best solution to the problem.

Overdraft limit

Banks set the overdraft limit individually for the client, based on the amount of income and their own calculation methodology. For example, some banks offer the following overdraft limits:
- Alfa Bank: advance overdraft - 750-6,000 thousand rubles; for customers at the cash desk - 500-10,000 thousand rubles;
- Uralsib: Visa Classic Light card with overdraft - up to 500 thousand rubles;
- Intertrustbank: card with overdraft - calculated individually;
- Absolut Bank: card with Infinite overdraft - up to 750 thousand rubles;
- Bogorodsky Municipal Bank: Card with Gold overdraft - up to 300 thousand rubles.

Overdraft conditions

Bank overdraft conditions vary significantly. For example, at the Bogorodsky Municipal Bank the following conditions for receipt apply: age from 23 to 55 years for women, for men - up to 60 years; confirmation of income and permanent registration in the region where the card was received. Absolut Bank will also require a certificate from the employer and a minimum income of 20 thousand rubles. The conditions for using an overdraft are also different. The interest rate can range from 18% to 30% per annum. You will either need to repay the debt in full within a month or pay a certain percentage of the debt, for example, at Absolut Bank it is 10% of the disbursed amount. There is usually no fee for issuing a card with an overdraft, but the cost of servicing can be significant. So at Absolut Bank it is 48 thousand rubles. per year, and at the Bogorodsky Municipal Bank - 650 rubles. What exactly is included in the service must be clarified with the bank.

Advice from Sravni.ru: When applying for an overdraft loan, carefully study the agreement. Feel free to ask questions. Be sure to find out the length of the grace period during which preferential rates apply, and try to return most or all of the amount during this time. Some banks do not have a grace period for overdraft transactions or do not apply to cash withdrawal transactions - do not forget about this.